Introduction to Credit Risk

Credit risk, as a core component of risk management, is a fundamental operating principle and a regulated area within both corporate and retail lending institutions. This course provides participants with an in-depth understanding of credit risk management, its key concepts, and the processes for monitoring and control under Basel II and III. It explores the areas and products that generate credit risk, the Basel Accords, and the associated regulations for measuring, managing, supervising, and disclosing credit risk. It also explains the approaches for calculating credit risk capital, as well as credit risk governance and reporting. Target Audience Risk managers and analysts. Credit operations managers and staff. Business managers and team leaders. Middle and back-office managers. Internal and external auditors. Professionals in risk management within financial services. Professionals in credit risk. Course Objectives Explain how to mitigate and manage credit risk. Analyze personal credit. Analyze corporate credit. Explain credit risk reporting. Explain the methods for calculating credit risk capital under Basel. Explain Collateral. Apply cases on Credit Risk. Course Outline Module 1: Mitigating and managing credit risk. What is credit risk? Governance and structure. Credit assessments and scoring. Cash flow monitoring. Recovery management. Module 6: Collateral The role of collateral. Types of collateral. Haircuts. Collateral under Basel II. The effect of collateral on credit risk capital: – The Simple Approach. – The Comprehensive Approach. – The Advanced Comprehensive Approach. Assessment Strategy Participants will be assessed on their interaction during sessions and the completion of the quizzes following the sessions.